Lighting Equipment Demand Strengthened During Second Quarter of 2012

Thu, 2012-09-06 15:59

NEMA’s Lighting Systems Index has shown a positive performance in the first half of 2012, as it gained 2.9% on a quarter-to-quarter basis from the first to second quarters of 2012. On a year-over-year basis the index increased by 6.6%, indicating that aggregate lighting equipment demand has improved appreciably since the recovery began; however, it remains well below the levels observed during the previous economic expansion. All five categories of lighting systems products included in the index registered solid gains compared to the second quarter of 2011.

Lighting output gains are likely to pick up over time as construction activity gradually improves. Housing is rapidly becoming one of the economy’s few “good news” stories, as the demographic cohort left behind in the wake of the collapse begins to return to the market. Building permits rose nearly 7% to 812,000 from June to July, the highest in almost four years. Total housing starts are projected to climb from 612,000 units in 2011 to 755,000 in 2012, 886,000 in 2013 and 1.11 million in 2014, with multifamily starts expected to see outsized gains both this year and next.

A sustained, broad-based rebound in nonresidential construction is taking longer to materialize. Activity slipped nearly 4% on an annualized basis according to advance data for the second quarter of 2012 The overall industry continues to be constrained by a retreat in publically funded infrastructure investment, though electrical intensive commercial construction fared somewhat better posting a second consecutive quarter of near 10% annualized growth. A sustained turnaround is expected, but not before late 2013 as employment and income growth remain slack and forward looking architecture billings in the doldrums.

By the latter half of 2013, with the homebuilding rebound in full swing and the electrical intensive commercial construction segments picking up in earnest, shipments growth in the electroindustry is projected to reaccelerate.